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Step 1
Research the payday loan laws for your state. Some states regulate the maximum annual percentage rate (APR), the number of loans a borrower can take out within a specified period and the maximum loan amount. See Resources below.
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Step 2
Make sure the lending agreement outlines the information in a clear and understandable manner. Typically, state law requires that the agreement should state the full loan amount, loan fee and the maturity date (when the loan becomes due).
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Step 3
Ensure that the borrower understands his options if he can't repay the loan on the due date. Although most states allow refinancing, some don't. Additionally, some states have placed a cap on the number of times that customers can roll over a loan, as well as the number of loans a borrower can take out.
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Step 4
Display a notice of your loan fees, interest rate and any other fees involved in a highly visible area if you have a storefront. Most states require lenders to comply with this state law. Moreover, if you offer online loans only, the notice should be available on your website where customers can view it before applying.
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Step 5
Have an active license to dispense payday loans in your state. Many states require lenders to have a license for each operating center (in the case of lenders with multiple centers).
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Step 6
Be aware that if you have a third party dispensing loans on your behalf, you're responsible for making sure that they comply with state regulations as well.
